Maryland biotech startups seeking capital will have a new option in 2012: the new InvestMaryland fund. The state will auction off up to $100 million of tax credits to insurance companies that pay state premium insurance taxes. The auction is expected to yield a minimum $70 million, of which 67% will be allocated to three or four venture capital firms to invest in promising startups in biotech as well as cleantech, green tech, and mobile health. The remaining 33% will be deposited into the state’s 15-year-old Maryland Venture Fund.
“What we anticipate is that by June of 2012, that the first tranche—the first year’s funding—will be in place,” Judy Britz, Ph.D., executive director of the Maryland Biotechnology Center, told GEN. “Over time, we might invest $1 million to $2 million in one company, but it probably will begin with initial investment in the hundreds of thousands.”
To attract ex-U.S. firms, Gov. Martin O’Malley (D) led a delegation that in December wrapped up a six-day trade mission to Hyderabad, Mumbai, and New Delhi. The delegation and the Federation of Indian Chambers of Commerce and Industry agreed to create an India-Maryland Center in Maryland.
During the trade mission, India’s Jubilant Life Sciences reported plans to spend $20 million to triple its warehouse space in Maryland and add new jobs. Also, the Bethesda-based professional group Women in Bio opened its first international chapter in Mumbai.
Dr. Britz said the Maryland Stem Cell Research Fund is drafting its first-ever request for proposals from companies seeking grant funding; until now, almost all grants have been awarded for projects in academic institutions. The state this year kept stem cell program funding at FY 2011’s $12.4 million, about half what was available three years earlier. State funding for Maryland Biotechnology Investor Tax Credits is also stable at $8 million, the same as FY 2011 and $2 million above FY 2010.
That stability of funding is about the best biotech clusters can hope for from state governments, at least until the economy emerges from the recession. Once that happens, the challenge will be more about spending smarter, especially since the U.S. faces the uncertainty that goes along with political turmoil and the certainty of competition from China, India, and the rest of the world.